The “leader” of the cross-border payment giant welcomes the new year.
On June 22, the CEO of digital payment platform PayPal China was approved to change.
As the first foreign-funded payment platform licensed in China, PayPal is making steady progress in promoting service merchants to go overseas based on its brand influence in the Chinese market.
However, many “back waves” on the current cross-border payment track are reshaping the industry’s new competitiveness, leaving PayPal China’s new coach with a test question.
Pay more attention to regulatory adaptability
The Beijing Branch of the People’s Bank of China approved the change of license for major matters for non-bank payment institutions, and approved Zhang Hong as the general manager and chairman of PayPal Payment (Beijing) Co., Ltd. (hereinafter referred to as “Paypal Payment”), and Liu Zhiyong as the company’s deputy general manager.
On the same day, PayPal officially announced the appointment of Zhang Hong as CEO of PayPal China, chairman and general manager of PayPal China’s licensed institution, PayPal Payments. He will comprehensively coordinate PayPal’s overall strategic planning, business innovation expansion and daily operation management in China, and lead the team to promote PayPal’s long-term development in the Chinese market.
Before the announcement of this appointment, there was market news that Qiu Han, the former CEO of PayPal China, had recently resigned.
Regarding this personnel change, PayPal responded that during his tenure, Qiu Han led the team to establish good relationships and cooperation foundations with merchants and partners in a complex and ever-changing business environment. The company is very grateful to Qiu Han for her extensive work in establishing the company’s China business and wishes her all the best in the future.
China is one of PayPal’s important international markets. PayPal’s long-term commitment to the Chinese market has not changed, and this adjustment will not affect the company’s strategic direction and daily operations.
According to reports, Zhang Hong will join PayPal in 2023 as PayPal’s global vice president, responsible for the implementation of a number of global key projects in China, including the recently launched WeChat payment interconnection project between PayPal World and TenPay Global.
What deserves more attention is Zhang Hong’s rich localization experience: before joining PayPal, Zhang Hong served as senior managing director and chief representative of the New York Representative Office of China Investment Corporation. He long-term coordinated corporate strategy, cross-border investment, corporate governance and overseas business development, and accumulated mature cross-regional management and practical experience in the Chinese and North American markets.
At the same time, Zhang Hong’s legal background has given the market more expectations for his follow-up direction.
Industry analysts pointed out that Zhang Hong’s appointment will help strengthen the connection between PayPal’s China business and the global compliance system. It is foreseeable that in the future, PayPal’s strategic planning in China will pay more attention to regulatory adaptability and institutional stability, promote implementable and sustainable cooperation models in core scenarios such as cross-border payments and merchant services, and improve the standardization and long-term certainty of local operations.
The strategy in China is conservative, the fundamentals are solid but there is still pressure to iterate
In 2019, PayPal entered the Chinese payment market through the acquisition of Guofubao (later renamed PayPal Payment), becoming the first foreign-funded payment platform licensed in China.
Judging from its subsequent actions, PayPal will focus its development mainly on cross-border payments and overseas services for Chinese merchants: the global payment platform launched in 2024 integrates a series of cross-border collection and payment products and solutions tailored for cross-border companies, helping Chinese companies of all sizes to easily collect and pay in a variety of cross-border trade scenarios; in 2025, the platform will be upgraded to version 2.0, with a stronger “AI empowerment” color.
Previously, the relevant person in charge of PayPal has publicly explained that its core competitiveness is its full-chain service capabilities: On the one hand, for small and medium-sized merchants and even larger enterprises, it is difficult to quickly establish brand trust when going overseas to unfamiliar markets, while PayPal’s global brand power and credibility can provide merchants with
Endorsement makes overseas consumers willing to pay with confidence, which is the core advantage of the front-end; on the other hand, even in the seemingly homogeneous market of fund settlement and repayment, PayPal has also achieved industry leadership, completing overseas U.S. dollar foreign exchange settlement and repayment to domestic bank accounts in 4 hours, and the fee rate remains low.
In terms of corporate governance, PayPal will increase its capital twice in 2021 and 2023, with its registered capital jumping from 143 million yuan to 4.52 billion yuan.
Industry insiders concluded that PayPal’s more than six years of development in the Chinese market can be summarized as prudent focus, based on the licensed entity PayPal payment, concentrating resources to serve cross-border trade scenarios, and focusing on supporting Chinese export merchants to receive overseas payments.
Judging from the performance, it has formed a large-scale user coverage, but at the same time it has not reached a high revenue share. Its cross-border collection business has maintained stable operation, and has served a number of Chinese merchants with continuous overseas income. It has built a verifiable transaction scale and compliance closed loop in B2B and B2C scenarios. There have been no major operational or regulatory risks, reflecting strong institutional adaptability and business sustainability.
However, the “conservative” strategy is also seen as a double-edged sword. Some industry observers pointed out that PayPal’s cross-border business relies on brand recognition and global account systems to serve large enterprises and high customer unit price scenarios. In contrast, many local cross-border payment institutions follow the route of “small and medium-sized foreign trade enterprises + vertical scenarios + API embedding”, with fast volume, high stickiness, and more competitive rates. If PayPal spends too much energy on licenses and compliance processes, product iteration will be significantly slower than its competitors.
As for future plans, Zhang Hong publicly stated: “PayPal’s original intention of serving Chinese companies going global remains unchanged. We will build on PayPal’s global network advantages, seize the opportunities of China’s booming digital economy, focus on the main cross-border payment business, continue to create payment products and services that are suitable for the local market and have core competitiveness, take into account innovation and compliance, provide Chinese merchants with safe, efficient and convenient cross-border payment solutions, and help Chinese companies achieve global and sustainable development.”
The combination of compliance and localization forms the core of breaking the situation
The domestic payment market stock competition is in full swing, and the cross-border track has now entered a stage of refined competition.
How to get out of differentiation and how to grasp the balance between compliance and innovation have become common questions faced by foreign payment institutions in the Chinese market.
As industry insiders bluntly say, compliance will become the core development trend of China’s cross-border payment industry in the next 3 to 5 years: on the one hand, regulators will continue to strengthen compliance requirements, and formal platforms operating with licenses will become the mainstream of the market; on the other hand, the industry will also pay more attention to the combination of “compliance” and “localization.” Platforms must not only be legally licensed, but also have a deep understanding of consumer habits, compliance rules and legal requirements in overseas markets. Only in this way can they truly help Chinese merchants achieve “going global, getting money back, and fund security.”
Industry analysts suggest that PayPal should first improve its local operation capabilities, including establishing a product and service team that is closer to the needs of Chinese merchants, and achieve rapid response to market changes and customer needs; second, it should deepen cooperation with domestic licensed institutions, platforms and clearing networks.
Within the compliance framework, new scenarios such as B2B cross-border settlement and inbound payment should be expanded, and the role of “connector” should be strengthened; third, new technologies such as AI and big data should be actively applied to achieve application breakthroughs in anti-fraud, risk control modeling, intelligent customer service and cross-border capital flow prediction, and improve service efficiency and system resilience.
Only by organically combining compliance bottom lines, local adaptation and technical capabilities can we maintain long-term competitiveness in the increasingly sophisticated cross-border payment industry.
Some people also point out that if PayPal wants to “maintain its position in the industry,” its core strategy should be to “go deep, not wide.” It will abandon head-on competition with local giants on the C-side and focus on high-profit, strong-barrier segments such as cross-border e-commerce B2B collection and payment. At the same time, it will use its global network advantages to help Chinese sellers solve tax compliance, return disputes and other “post-payment services” in the European and American markets, creating a core moat that is difficult for rivals to copy in the short term.
